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CA Intermediate · Auditing and Ethics · Audit Strategy, Audit Planning and Audit Programme

Mehta & Associates, a firm of Chartered Accountants, has accepted the statutory audit of Kaveri Textiles Ltd for the year ending 31 March. The engagement partner wants to decide how the audit should be conducted overall, including scope, timing and direction, and the resources needed. Under SA 300, which activity is this?

The activity is establishing the overall audit strategy. Under SA 300, the auditor sets the scope, timing and direction of the audit and determines resources, and this strategy then guides the more detailed audit plan. Reporting and representation letters belong to the completion stage, not planning.

  1. AEstablishing the overall audit strategyCorrect
  2. BDrafting the final audit report
  3. CObtaining the management representation letter
  4. DPerforming substantive analytical procedures on year-end balances

Explanation

SA 300 requires the auditor to establish an overall audit strategy that sets the scope, timing and direction of the audit and guides the development of the detailed audit plan. Drafting the report and obtaining representations occur at completion, and substantive procedures are performed after planning.

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